Month Net Return Inception p.a. Inception Total Net Total ...
9%NET RETURN
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9%NET RETURN Family businesses make up 70 per cent of all businesses in Australia and considerable research has been undertaken into what makes them different to their counterparts in the public company arena. In researching this issue John L. Ward from the Loyola University of Chicago recalls the time when a man’s word was his bond. He refers to a time when business was done on a handshake, on trust. A time when business was based on relationships, often family relationships. “I knew your father. I knew your grandfather.” These statements meant: “I know your values, your background and how important your reputation is to you, so I know I can trust you and I am comfortable doing business with you.” With ever-increasing competitive pressures, low margins, rapidly changing markets and technology and the emergence of bigger, more bureaucratic companies, there is an increasing appetite for working relationships based on trust, reliability, and long-term orientations. Because family businesses often foster these values, they are seen as desirable business partners. Therefore, if we identify one of the key differences between corporate businesses and family firms as being the ability for consumers to build a trusting relationship with the “name above the door” then we can realise why many family firms are returning to promoting themselves as family-owned and operating with family values. Of course, it is not enough just to rely on your family name or good reputation. Like their public company counterparts, family businesses need to be competitive in the business arena on price, quality and service. Family businesses also need to be run as professionally as possible and not as a mum-and-dad operation. External influences are essential to ensure that decisions are made in the best interest of the business and not necessarily the family. Management of the highest calibre that the business can afford should be employed to ensure the business operates at its optimum to ensure the competitive advantage mentioned earlier can be capitalised on. Many challenges exist on the path to professionalising a family business, such as resistance to change. The first generation that started and built up a business grows accustomed to doing things one way — their way. Along comes the second or third generation, quite often with university qualifications and/or external work experience. This new generation can see that certain things could be modernised or done differently and this is often met with resistance. Professor Ward, who will be the keynote speaker at the National Family Business Australia conference later this year, summarised his findings succinctly when he said: “With the reputation of your family on the line, with your personal integrity behind every handshake, and with the economic future of your heirs at stake, owning a family business is not only a significant responsibility but also an opportunity for an increasingly valuable competitive advantage.” When reputation is relatively important FAMILY BUSINESS BRIEFING ■ Andrew Mostyn ................................................................................. ■ Andrew Mostyn is WA chairman of Family Business Australia
Transcript of 9%NET RETURN
Rebecca McCrackan & Cherie VanWensveen
Fourteen enterprises received a funding boost at the launch ofthe 2012 WA Innovator of the Year Awards, but it was Whisperthe cockatoo that stole the show, posing with science andinnovation minister John Day, Mitsubishi Australia generalmanager of business development David Lake and owner JohnChamberlain of Cocky Smart, inventor of an organic sheepflystrike repellent. PICTURES JOHN KOH
WA INNOVATOR OF THEYEAR AWARDS LAUNCH
John Chamberlain, John Day & David Lake with
Whisper the cockatoo
Paul Kristensen, Stephen Carroll, Susannah Carr & Phil Kemp
Sam Birmingham& Brodie
McCulloch
Leearne Hinch, Liddy McCall &Sheryl Frame
Daniela Mattheys & Tim Sawyer
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Family businesses make up 70 percent of all businesses in Australiaand considerable research hasbeen undertaken into what makesthem different to theircounterparts in the publiccompany arena.
In researching this issue JohnL. Ward from the LoyolaUniversity of Chicago recalls thetime when a man’s word was hisbond.
He refers to a time when
business was done on ahandshake, on trust. A time whenbusiness was based onrelationships, often familyrelationships. “I knew your father.I knew your grandfather.” Thesestatements meant: “I know yourvalues, your background and howimportant your reputation is toyou, so I know I can trust you andI am comfortable doing businesswith you.”
With ever-increasingcompetitive pressures, lowmargins, rapidly changingmarkets and technology and theemergence of bigger, morebureaucratic companies, there isan increasing appetite for working
relationships based on trust,reliability, and long-termorientations.
Because family businesses oftenfoster these values, they are seenas desirable business partners.Therefore, if we identify one of thekey differences between corporatebusinesses and family firms asbeing the ability for consumers tobuild a trusting relationship withthe “name above the door” thenwe can realise why many familyfirms are returning to promotingthemselves as family-owned andoperating with family values.
Of course, it is not enough justto rely on your family name orgood reputation. Like their public
company counterparts,family businesses need tobe competitive in thebusiness arena on price,quality and service. Familybusinesses also need to be
run as professionally as possibleand not as a mum-and-dadoperation.
External influences areessential to ensure that decisionsare made in the best interest of thebusiness and not necessarily thefamily.
Management of the highestcalibre that the business canafford should be employed toensure the business operates at itsoptimum to ensure thecompetitive advantage mentionedearlier can be capitalised on.
Many challenges exist on thepath to professionalising a familybusiness, such as resistance tochange.
The first generation that startedand built up a business growsaccustomed to doing things oneway — their way. Along comes thesecond or third generation, quiteoften with university
qualifications and/or externalwork experience.
This new generation can seethat certain things could bemodernised or done differentlyand this is often met withresistance.
Professor Ward, who will be thekeynote speaker at the NationalFamily Business Australiaconference later this year,summarised his findingssuccinctly when he said: “With thereputation of your family on theline, with your personal integritybehind every handshake, and withthe economic future of your heirsat stake, owning a family businessis not only a significantresponsibility but also anopportunity for an increasinglyvaluable competitive advantage.”
When reputation is relatively important FAMILY BUSINESS BRIEFING
■ Andrew Mostyn
.................................................................................■ Andrew Mostyn is WA chairman of
Family Business Australia
WA FAMILY BUSINESSSTATE CONFERENCE
Kim, Margaret, Mark & Graeme Yukich
Jane Newbound & Elizabeth Newbound
Lyndel Quinn-Schofield, Ross Nunn &Clayton Quinn-Schofield
Petta, John & Samantha Libby
Simon Bedbrook, Maria Kailis, Lee Reed,& Lorraine Willis
Jodie Curtis, Emma Chinnery,Sophie Tedeschi & Lauren Aveling
Oakover Wines in the Swan Valley, ownedby the Yukich family, was the setting forFamily Business Australia’s annual WAState conference. About 85 peoplegathered including family members fromthe Bett’s Group and Kailis Group.
PICTURES GERALD MOSCARDA
THE EXCHANGEHave you been photographed?Visit thewest.com.au/businessTo order prints, phone PressPhotos on 9482 2378. To tell us about an event, [email protected]
6 WEST BUSINESS thewest.com.au Wednesday, May 9, 2012
Tim Jones, Mark Pullen & Rob Davis
Shawn Ryan& Glen Ryan
